TOURISM SUPPLY CHAINS: A CONCEPTUAL FRAMEWORK

Pairach Piboonrungroj and Stephen M. Disney

Logistics Systems Dynamics Group,
Cardiff Business School,
Aberconway Building,
Colum Drive,
Cardiff, UK,
CF10 3EU
piboonrungroj@gmail.com

ABSTRACT

The literature on tourism supply chain management (TSCM) is reviewed. We explore

current TSCM research in academic databases, namely Scopus, ABI/INFORM Global
(Proquest), ScienceDirect and EBSCO as well as Google Scholar. Accordingly, a
systematic literature evaluation is conducted to obtain an overview of the current state
of research on TSCM. We found that there is limited amount of research on TSCM.
Furthermore, the finding shows that the existing research frameworks for TSCM do
not yet provide a holistic view of TSCM. Moreover, we found that the current issues
in TSCM are concerned with applying SCM to tourism management. Thus, we
propose a new framework for research on TSCM. Then potential research questions
are discussed and suitable research methods are identified.

KEYWORDS: tourism management, service supply chain management, literature

review.

1. BACKGROUND

No matter what the economic climate, tourism has a significant impact on global and
local economies (UNWTO 2009, Antunes 2000). During economic booms, the
tourism (especially international tourism) sector absorbs wealth from people on trips
away from their homes (Kim et al. 2006; Lee and Change 2008). On the other hand,
during an economics crisis, domestic tourism is one of the key mechanisms for
restoring the economy. This could be because many governments see that tourism can
also create new jobs (Seckelmann 2002; Page 2009). Tourism has been recognised as
a complex system (Jafari 1974; McKercher 1999; Smith 1994; Véronneau and Roy
2009). Business management in the tourism industry critically needs to consider

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supply chain perspectives not only to increase their efficiency and profitability (Zhang
et al. 2009; Véronneau and Roy 2009) but also to ensure sustainability (Schwartz et
al. 2008).

Furthermore, Tourism Supply Chain Management (TSCM) is currently emerging as a

new research agenda (Zhang et al., 2009). One of the reasons for this is that supply
chain management (SCM) has already become a critical source of an organisations
competitive advantage (Christopher 2005). Therefore SCM is considered to be a vital
part of any kind of business. However, research on TSCM is still rather immature and
very limited at the moment (Zhang et al., 2009). Consequently, the objective of this
study is to provide a research framework for TSCM research. The potential research
topics in TSCM are also identified.

2. LITERATURE REVIEW

To obtain the current state and evolution of TSCM research, we conducted a

systematic literature search of the academic databases; Scopus, ABI/INFORM Global
(Proquest), ScienceDirect and EBSCO 3 as well as Google Scholar using the
keywords of, “tourism supply chain”, “travel supply chain”, and “hospitality supply
chain”. Then we found that TSCM research is currently very limited. There were only
44 studies found in these databases.

Most of TSCM literature has been published in 2008 and 2009 (29 papers or 66%).
Figure 1 highlights the quantity of TSCM research over time. We found that there are
two stages of TSCM research. The first stage is the era before 2007 where there are
only conceptual framework papers and no empirical studies conducted. Secondly, in
another stage since 2007, the number of TSCM research has rapidly increased.
Moreover, in this stage of TSCM research, more empirical studies are published than
conceptual framework papers.

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Furthermore, we employed a content analysis to identify the main focus of each
paper. Methodology and the geographical focus of the research will be classified if the
study is empirical research. The findings show that a half of empirical studies were

Surprisingly, there are only 12% of empirical studies were found in the Americas, all
in Canada. Within Europe, most empirical studies were conducted in the UK, Spain
and Finland (4, 2, and 2 studies respectively). On the other hand empirical studies on
TSCM in Asia are only in China and Thailand (4 and 2 studies respectively). It could
be argued that empirical research on TSCM tends to be conducted only on the most
famous tourist destinations.

Considering the research methodology, a case study approach is a dominant choice

(14 studies). There are only three works using quantitatively approaches. Moreover,
the result shows that all studies conducted in Europe employed the case study
approach. This significant role of case study approach in TSCM research could be due
to the advantage of the case study that can gain depth and insights from the complex
phenomenon. Details of the previous literature on TSCM can be found in Appendix
A.

3. WHAT ARE THE TOURISM SUPPLY CHIANS?

This study offers a four-step approach to define the tourism supply chains.

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(1) Defining tourism industry

The confusion of the terminologies between tourism, travel and hospitality could mis-
lead researchers (Pizam 2009). Therefore, it is critical to clarify the definition of
tourism. Firstly, services provided by the hospitality and travel industry are partly for

hospitality industry and the travel industry. Precisely, we can identify distinct
activities in the tourism industry by considering whether they serve tourists (Figure
2).

(2) Specifying special characteristics of tourism

There are two main distinctive characteristics of the tourism industry. Firstly, on the
supply side, tourism is not a pure manufacturing or a pure service industry (Jafari
1974; Page 2009; Zhang and Murphy 2009). It is a mixture of products combining
services and goods. Tourism is a very complex industry. Tourism supply chains
(TSCs) consists of various parties that are highly connected (March and Wilkinson
2009; Zhang et al. 2009). Thus coordination in TSCs is highly intensive. Secondly, on
the demand side, tourism demand has been recognised as a complication (Sigala 2008,
Lafferty and van Fossen 2001)). High volatility and sensitivity to the disturbances of
tourism demand requires an insightful knowledge to manage it.

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(3) Identifying tourism supply chain components

A generic supply chain usually comprises of raw material providers, suppliers,

manufacturers, distributors, wholesalers, and retailers. However, it is not suitable to
use this approach to describe the TSCs because it is a complex system that consists of
various supply chains. Therefore, it could be more meaningful to use a correlation
matrix approach (Figure 3) that is derived from the tourism supply chain links
(Tapper and Font 2004, p.4).

According to the figure 3, we found that TSCs consist of various components linking
to each other. However, we may classify components in TSCs by their functions as
followings.

a) Input providers (sources)

As the second tier supplier, input providers have a role of supplying resources and
materials for service operations in the first tier (Smith 1994; Zhang et al. 2009). We
can classify input providers into different types by materials they supply. However,
one of the important input providers is the food suppliers or the food supply chain
(Font et al. 2008). Webster (2001) discussed the scope and structure of food supply

136
chain from the sources of primary inputs (resources). They are agriculture sector,
wholesalers, retailers, and final customers (Smith 1994).

b) Service providers (service producers)

Service providers (1st tier supplier) are considered to be the core facets of TSCs
(Zhang et al. 2009; Tapper and Font 2004). Firms in the first tier suppliers directly
contact with the customers even though tour agencies or tour operators may manage
the combination and linkages between each of the service providers (Véronneau and
Roy 2009). Therefore, satisfaction of the tourists is largely based on the performance
of service providers (Yilmaz and Bititci 2005).

c) Intermediaries: tour agencies and tour operators (product assemblers)

Tour operators and tour agencies have a massive influence on TSCs (Schwartz et al.
2008, Font et al. 2008). The critical role of the tour operators is controlling the flow of
tourists and partly managing the tourism supply chain (Zhang et al. 2009; Muhcina
and Popovici 2008). Considering this vital role of tour operators, they may be
considered to be forth-party logistic service providers (4PLs), acting as architects,
designing the supply chain.

d) Freight transport (physical flow connectors)

In a typical supply chain, freight transport is the integrator of the physical flow
(McKinnon 2001). In TSCM, freight transport still has an important role to ensure the
seamless transactions between input providers and service providers (Véronneau and
Roy 2009). Various techniques for managing efficient transport operations in
traditional supply chain, such as vendor managed inventory (Disney et al. 2003) or
factory gate pricing (Potter et al. 2007), could be also applicable for TSCM.

e) Passenger transport (customer flow enablers)

Not only does freight transport play a significant role in TSCM but also passenger
transport play an important role. This critical role of passenger transport is to
seamlessly move the tourists along their trips (Fawcett 2000; Duval 2007).

According to the previous discussion, TSCs are considerably complex. It composes of

various supply chains (Tapper and Font 2004; Muhcina and Popovici 2008). Apart

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from the components of TSCs discussed previously, it is noteworthy to state that there
are also other important components i.e., souvenirs, energy and waste management
which are rarely studied (Zhang et al. 2009).

(4) Outlining flows and processes

Finally we outline flows and processes of the TSCs by proposing a generic tourism
supply chains model (Figure 4), which is derived from combining perspectives of
both the demand and the supply side. In this model, there are four major flows
including physical flow (Zhang et al. 2009), information flow (Go and William 1993;
Bignné et al. 2008), and customer flow (Fawcett 2000).

This model represents components and flows in typical TSCs that can be divided into
three phrases. Firstly, after the customers decided to make a trip, information inquiries
and booking procedures with tour agencies or via the internet, and then the
transactions between the tour agencies/tour operators and service providers. The
second part is a combination of supply chains that associate to tourism such as
lodging (hotel), catering (restaurant) supply chain, and passenger transport supply
chains. There are two tiers of suppliers. Firstly, input providers who supply resources
for service operations such as foods and beverages (F&B) or equipments. Another tier
is the service provider that contacts customers (tourists) directly. Thirdly, after the
trip, there may be some after sales services or activities between tourists and service
providers/ tour agencies.

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4. CONCEPTUAL FRAMEWORK FOR TSCM RESEARCH

After we have a generic form of TSCs, then we can illustrate the research framework
for research on TSCM (Figure 5). There are three major focuses in the framework
(designs, relations, and performance measurements) under the concept of SCOR

2009). Firstly, supply chain design is a critical starting point of TSCM. In TSCM,
supply chain should be designed preliminarily based on what the targeted tourists
want. The other aspects of the design process such as strategy, distribution or pricing
could also be considered (Chopra and Meindl 2007). Secondly, the core of TSCM is
relationship among stakeholders. Unlike typical SCM that considers only buyer-seller
relationship, in TSCM they are those correlations between TSC quartets that are

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performance measurement covers four aspects including external, financial,
operational, and development that are considered in the balance score card (Johnston
and Clark 2008).

5. RESEARCH OPPORTUNITIES

The potential research agendas which could enable the better understanding of the
TSCs have been identified. Furthermore, because SCM is a study of the relationships
between each player along the supply chain, therefore another vital research agenda
could be the collaborations of the TSCs. To an extent, drivers and impacts of

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collaboration in TSCs can be the focal consideration. Thus, we found some emerging
topics in the literatures that are still the gaps. We outline five potential research
agendas with specific research questions that should be answered.

(1) TSC design

What is the right tourism supply chain to a particular situation?

How can we identify it?

(2) Collaboration in tourism supply chain

What type of collaborations existing in TSCs?

What are the antecedents and the benefits of collaboration in TSCs?

(3) Performance measurement

Which aspect that we should consider when measuring TSCM performance?

How can we measure supply chain performance in tourism?

(4) Managing risk and uncertainty in Tourism Supply Chain

What are risks and uncertainties of TSCs?

How can we measure and mitigate risks in TSCs?

How can we design ICT systems in TSCs?

How can we identify the right E-business model for a particular TSC?

In terms of research methodology, TSCM research could employ either qualitative or

quantitative research methods or both (Piboonrungroj 2009). There are various

research methods the selection of research method should be based on types of
research questions and research objectives (Yin 2003). Examples of methodological
selection in TSCM research can be obtained in Piboonrungroj (2009). Nevertheless, it
was found that most of the empirical studies have employed the case study approach
to provide an in-depth analysis. However, concerning the level of generalisation of the

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research, survey-based research using advance statistical methods such as structural
equation modelling or econometrics could offer a better reliable model of the TSCM.

6. CONCLUSIONS

There is a growing consensus that a single company no longer competes in the

marketplace but rather its supply chain that competes (Christopher 2005). Therefore,
tourism is also a business that inevitably has to consider SCM. Various research
topics suggested in this paper could extend the scope of the existing SCM research.
The proposed research framework could also enable researchers in both tourism and
SCM areas to comprehensively explore and examine the phenomenon in the TSCs.
Undertaking this model, the research employed in other industries could be applied in
TSCM research. Finally, considering the immaturity of the TSCM concept, the
generic tourism supply chain in this present study may be a robust model for future
research on TSCM.

ACKNOWLEDGEMENT

The authors are grateful to the Royal Thai Government through the Commission on
Higher Education for financial support of Mr. Piboonrungroj’s study in Cardiff
University.

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